Dunnellon chooses Wideband Networks to take over Greenlight

In this file photo, a Greenlight Communications employee separates an 8 strand fiber optic cable while installing the cable at the Dunnellon Police Department. The city will negociate with Wideband Networks to have it take over the utility.

Published: Friday, August 30, 2013 at 2:15 p.m.

Last Modified: Friday, August 30, 2013 at 2:15 p.m.

The Dunnellon City Council on Thursday chose Wideband Networks to take over the ailing Greenlight Communications, which has been hemorrhaging cash since it started two years ago.

Officially, all the City Council did Thursday was agree to a "letter of intent" that allows them to begin negotiating a sale of the telecommunications utility to Wideband.

The sides still have to negotiate two deals. One would allow Wideband to immediately assume temporary control of the struggling utility so the city can rid itself of a system that had been losing as much as $250,000 per month until recently. All the operational costs would shift to Wideband.

City officials hope to have that agreement in hand by the middle of next week and could vote on it either Sept. 5 or Sept. 9.

The second deal would be for the sale of Greenlight to Wideband.

Under the letter of intent approved Thursday, Wideband has tentatively agreed to pay $3.85 million for Greenlight, which has about 500 internet, phone and cable subscribers in and around the city of Dunnellon. That price could change during negotiations over the coming weeks.

John Pierpont, a local consultant who is handling the sale for Dunnellon, said Wideband has also tentatively agreed to run Greenlight until the sale is completed but wants to recoup its costs. It will likely negotiate to knock those costs off the final purchase price, Pierpont said.

Once the sale is completed, Dunnellon will still carry a significant amount of debt related to the system. The city borrowed $8 million from Regions Bank to start Greenlight. Assuming the proceeds from the sale were used to pay off part of the loan, Dunnellon would still owe Regions more than $4 million.

City officials said they would have to develop new sources of revenue to pay off the remaining debt, which could mean imposing new fees on city residents.

While the city works through a deal with Wideband, it has received some hopeful news.

Nicole Nate, an attorney with Bryant Miller Olive, the law firm that is helping the city resolve its Greenlight problems, said Thursday that the city may not have to declare a state of financial emergency after all.

By state law, municipalities have to inform the governor's office that they have financial emergencies when it appears they will not be able to meet their debts. The state has several options at that point. It can simply monitor the muncipality's attempts to resolve its problem, or it can step in and impose a solution on the city.

After a financial review revealed the extent of the Greenlight problem, city officials began preparing to file paperwork declaring an emergency. The impending sale of Greenlight, however, has pushed the city back from the brink of financial disaster and made it less likely that it will have to make such a declaration, Nate said.

"Which is a wonderful piece of news," Mayor Nathan Whitt said, "Once you go down that road, it's not the road you want to be on."

<p>The Dunnellon City Council on Thursday chose Wideband Networks to take over the ailing Greenlight Communications, which has been hemorrhaging cash since it started two years ago.</p><p>Officially, all the City Council did Thursday was agree to a "letter of intent" that allows them to begin negotiating a sale of the telecommunications utility to Wideband.</p><p>The sides still have to negotiate two deals. One would allow Wideband to immediately assume temporary control of the struggling utility so the city can rid itself of a system that had been losing as much as $250,000 per month until recently. All the operational costs would shift to Wideband.</p><p>City officials hope to have that agreement in hand by the middle of next week and could vote on it either Sept. 5 or Sept. 9.</p><p>The second deal would be for the sale of Greenlight to Wideband.</p><p>Under the letter of intent approved Thursday, Wideband has tentatively agreed to pay $3.85 million for Greenlight, which has about 500 internet, phone and cable subscribers in and around the city of Dunnellon. That price could change during negotiations over the coming weeks.</p><p>John Pierpont, a local consultant who is handling the sale for Dunnellon, said Wideband has also tentatively agreed to run Greenlight until the sale is completed but wants to recoup its costs. It will likely negotiate to knock those costs off the final purchase price, Pierpont said.</p><p>Once the sale is completed, Dunnellon will still carry a significant amount of debt related to the system. The city borrowed $8 million from Regions Bank to start Greenlight. Assuming the proceeds from the sale were used to pay off part of the loan, Dunnellon would still owe Regions more than $4 million.</p><p>City officials said they would have to develop new sources of revenue to pay off the remaining debt, which could mean imposing new fees on city residents.</p><p>While the city works through a deal with Wideband, it has received some hopeful news.</p><p>Nicole Nate, an attorney with Bryant Miller Olive, the law firm that is helping the city resolve its Greenlight problems, said Thursday that the city may not have to declare a state of financial emergency after all.</p><p>By state law, municipalities have to inform the governor's office that they have financial emergencies when it appears they will not be able to meet their debts. The state has several options at that point. It can simply monitor the muncipality's attempts to resolve its problem, or it can step in and impose a solution on the city.</p><p>After a financial review revealed the extent of the Greenlight problem, city officials began preparing to file paperwork declaring an emergency. The impending sale of Greenlight, however, has pushed the city back from the brink of financial disaster and made it less likely that it will have to make such a declaration, Nate said.</p><p>"Which is a wonderful piece of news," Mayor Nathan Whitt said, "Once you go down that road, it's not the road you want to be on."</p>